Episode 5: How to Fight Consumer Fraud in the Hair Extension Industry

November 9, 2017

Episode 5 Summary

On this episode of Hair Biz Radio Mikey and Zakiyrah discuss consumer fraud.

Contest – Winner Chosen on 11/23/17

In this episode, you have to listen to find out how we are giving away a free 1-Year membership to Dropship Bundles!

Show Notes:

  • With any business, you often plateau and then don’t see growth for six months at a time or so.
  • No matter what it is that you’re launching, if you take the same principles that you used in the beginning, you can create many businesses.
  • Nicki Minaj brought back extremely long hair.
    • If you’re going to have long strands of hair, it’s important to have thick strands of hair so it doesn’t break.
  • The worst part of the hair industry is consumer fraud, and it’s prevalent in the hair industry.
  • A lot of the time, scammers get away with fraud because small business owners don’t have policies and procedures in place like bigger companies do.
  • There may be times when orders come through smoothly, and then you get hit with a chargeback on PayPal.
    • We will discuss how to deal with this further.
  • What does Private Label Extensions do:
    • They do not allow online orders for in-store pickup.
    • The checkout has billing and shipping in one column to avoid someone with a stolen credit card putting different billing and shipping addresses.
  • It’s difficult to catch these people.
  • If they want to ship something to a different address, you have to check out with PayPal and your address must be a PayPal confirmed address.
  • This gives the seller a ͞seller protected͟ guarantee.
  • If someone moves, they have to call the credit card company and provide the new address.
    • When you do get a chargeback on PayPal, you need to be attentive to it and provide all the information they need quickly.
  • You’ll need to provide, tracking, billing, and shipping and other verifications.
  • If your order is over $300 or look fraudulent or is a new customer, Private Label Extensions does verification to match information.
    • Use PCI compliant systems.
    • It makes credit card processors looks bad when chargebacks come through, so several payment processors won’t work with the hair extension industry anymore including:
      • Stripe, Shopify
      • Processors that still work with the hair industry:
  • PayPal, Square, Authorize.net
  • If business owners work together to help reduce fraud, the hair industry may be able to get out of the high-risk category.
  • The magic number is 1%. If 1% of your orders are chargebacks, PayPal will lock your account and hold back 50% of your funds, this makes it difficult for you to run a business.
  • People committing fraud often target small companies.
    • They are bold and will order over and over.
  • Fraudsters will often get express shipping to get the product shipped out as fast as possible so you lose control of the hair.
  • Look at the names and take them into consideration.
  • Mikey created a website called Consumer Fraud Agency.
    • Create a free account and list the address your product was sent to and use the email.
    • You can copy/paste the email in search and the result will come up on consumerfraudagency.com.
  • If you’re selling retail and people are buying multiple bundles at retail price, that’s a red flag.
    • If they’re purchasing that much in retail, they could go purchase wholesale.
    • They’re trying to buy into the business owner wanting to make money by having what looks like a big order.
  • Hair Biz Radio is doing a giveaway
    • Leave an honest review of this podcast on whatever platform you’re listening on.
    • Leave a comment on the episode 5 show notes about topics you’d like to hear on the podcast.
    • You could win a one-year membership to dropshipbundles.com.
  • Look into ways to repurpose any content you’re creating and use it on multiple channels like Facebook, YouTube or your blog.
  • Creating an email list is extremely important
    • Sign up for MailChimp, the first 2,000 subscribers are 100% free.
    • Also available on mobile in app form to get an email address and subscribe on the go.
  • In 2018 there are reports that Facebook and Instagram posts by businesses will not show up unless they are paid.
    • Facebook owns Instagram.
  • Start writing blog posts and using email to get in touch with people to create customer interaction.

Verification Email Discussed in Episode

Welcome to (Your Website Name)

Before we ship any orders for with your account we must first VERIFY you are the cardholder that made this purchase.

This is an important step to reduce fraudulent charges and chargebacks. As a business owner, you know the importance of this.

Verifying your purchase only needs to be completed once to fully activate your account. Please follow the steps and reply to this email with the required identity verification.

To verify your order please respond with a photo of the credit card used, ONLY THE LAST 4 DIGITS AND NAME NEED TO BE VISIBLE.

In addition please provide a photo of your driver’s license, ONLY NAME ADDRESS AND PHOTO NEED TO BE VISIBLE.

Order Verification Email

Please reply to this email with your verification.

If you have any questions regarding the verification process please call us at (Your Phone Number) during our business hours Monday – Friday (9 am – 5 pm).

Any orders placed will be held until your verification is complete.

If the verification is not completed within 3 business days your order will be fully refunded.

Tweetable Quotes:

“If Instagram and Facebook were to shut down tomorrow, would you still have the clientele that you have now?”

Resources Mentioned

Hairbizradio.com – Podcast website
Private Label Extensions – Wholesale Hair Vendor
PayPal – Hair industry-friendly payment processor
Square – Hair industry-friendly payment processor
Authorize.net – Hair industry-friendly payment processor
Consumer Fraud Agency – Mikey’s website to report fraudulent activity
Dropshipbundles.com – Win a year membership here in Mikey and Zakiyrah’s giveaway
MailChimp – Email automation software
Podcastingpress.com – A great service for podcast editing

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21 comments on “Episode 5: How to Fight Consumer Fraud in the Hair Extension Industry

  1. Dominique Wooten Nov 9, 2017

    It was great because fraud is everywhere and we need to all come together to overcome it so we can all succeed together. I love listening to you all and how you all talk about things that people do not look into when going into the hair industry but fraud is a serious matter and we have to come together to bring it to a stop.

  2. Brittani Williams Nov 9, 2017

    Thanks for creating this Podcast! It very informational. I am hoping you can devote a show to explain how to ensure the hair purchased is quality hair. I would also love a part two of the social media marketing.

    Thanks again!

  3. jardelle guilloux Nov 9, 2017

    Good Evening Mikey & Zakiyrah
    I would like to start off by saying this podcast was extremely informative. I didn’t know that fraud existed. I didn’t know people will go so deep into doing fraudulent activities with a debit or credit card. Thank god for you guys for literally having it step by step in what will be done to prevent fraud. I myself am trying to get into the hair industry one day and this podcast takes the cake for informative information. I like how mike will track down the scammers which is great it helps everyone involved in the business each one teach one. I am so eager to learn more about the Do’s and Don’ts of the hair industry I loved how you touched about the topic in wanting to start a hair business but don’t have the funds to start that’s my biggest problem. I want to branch out but i don’t have the funds . I also find the email confirmation is very helpful it’s letting the customer know that the order is going under an investigation since their is so much fraud being done. I love the idea of dropshipping because I don’t have to have the product on hand my clients can order it online and it goes directly to them which is great. Keep up the amazing work you two and everyone involved in this business thank you.

  4. This podcast was AMAZEBALLS!! I love the art of business. I enjoyed the section on fraud and how to prevent fraudulent purchases as best as we can.
    I also finally see why it is so vital for you guys to ask us for more information when we place our orders through PLE and why you may have to have extra verification. Yes, it was annoying at crunch time when we need our hair for a customer’s install in 3 days. Lol! However, I understand why it is important. I would like to hear more about staying relevant in this social media world while maintaining our brand. I also would like to hear how to maximize profits from sales. For instance, how do we know what are the staples to purchase and pretty much guarantee that those products will be the movers and turn a profit.
    I wish you could get different people from various industries on. Like the “Sharks”, Marcus Lemonis, wig makers, beauty pros, etc.
    Thank you! I’m going to subscribe!

  5. You guys are Awesome!!! From the emails to the newsletters now the podcast. I have received a host of free information about running a successful Hair business, that others in the industry are charging large sums of money for. I would love to here you address competitive pricing as well as industry networking in the future.

  6. Kari Barnes Nov 10, 2017

    This is very informative! I had no idea about PayPal Chargebacks and will send that email to all who register on my website from now on.
    Thanks for this tip!
    For future podcasts, please discuss more of these potential pitfalls, best plugins for WordPress to have an effective website, and marketing tips.

  7. LaTorya Graham Nov 10, 2017

    To be honest it was very informational. You guys talked about things I didn’t know existed. Thanks for taking the time out to give the podcast, the written content was great plus the pic example of the i.d. I think a little more visuals on the page while listening to the podcast would not only draw in your audience but have the information stick.

  8. Clarence Foster Nov 10, 2017

    Great show and very informative. We are looking to use a bank merchant to process payments which is normally PCI compliant but we will check to make sure. Great advice. Future show recommendations are Setting up Brand Ambassodors Do’s & Dont’s, Getting more IG Followers; which magazines are reputable for article publishing and how important is getting the Better Business Bureau on your website?

  9. C.Hollingsworth Nov 10, 2017

    I loved this post you guys! It informs and gives much needed knowledge on fraud, which is a serious issue in today’s world. I work in the banking industry and see it numerous times, if not daily. I would like for you all to expand more on ways to maximize profits, elaborate on more creative ways to market and keep prices competitive in order to grab the buyers attention. Ive subscribed, looking forward to hearing the next Podcast/vid & I’m SO excited to get things started !

  10. LaChelle Williams Nov 10, 2017

    Great information for people like myself trying to start their own hair business! I look forward to these episodes with my notepad in hand!! Can you talk about setting prices, and the pros and cons of having discount codes, coupons, and promotions?

  11. Jamika Simpson Nov 12, 2017

    This podcast gave me SO much information that I never even thought of about the hair business, I would like to thank you guys for even sharing this information! You guys are a blessing in disguise, I would love to hear a podcast about the blood, sweat, and tears behind starting your own hair brand and keeping it afloat along with the Do’s and Dont’s of the hair business. I would also like to hear about branding yourself, engaging customers, and knowing the difference between the grades of hair that’s actually out there and what’s best all around. I look forward to listening to more of these informative episodes from the both of you, Thanks again!

  12. Shadae Brown Nov 13, 2017

    I want to say thank you for making this podcast. I Know that fraud is a big thing but i didn’t know that there were as bad as explained in the podcast . All the information you guys provided was extremely helpful. I’m in the process of starting my own hair brand/company and this would be absolutely great and life changing. This company get extremely good reviews and i couldn’t help but order some hair 🙌🏽 In the next podcast can you discuss budgeting and marketing. Thank you again for this informative podcast.

  13. Porshe Gunn Nov 13, 2017

    Im actually in the process of research and save area of starting my business. I honestly wasn’t going to listnen to the podcasts because I wasnt going to learn from it, but this was very informative and it was just what i needed to add to my research. I knew there were scammers out there and my biggest fear was how to prevent it or deal with them. Im going to copy and past all the notes and go and listen to the other episode as well. I would love to learn more about social media marketing and also proper advertising online. I would also like to learn everything there is to know about the different types of hair out there for marketing purposes. Thank you for this and I am definitely looking forward to the next episode.

  14. Enjoyed listening to your podcasts. They are all very informative. The things that we would love for you to discuss world be packaging when shipping to customers. Is packaging that important? Also, about Hair ambassadors. and finally doing something different to make your hair business stand out from the competition. Thanks! Cheryl

  15. Hi there,

    First, I would like to start by saying that I really appreciate the effort and time that you two place in providing extensive and valuable information for your listeners. I recently came across this podcast and I am so happy that I did! I think that as a business owner the learning never stops, and I plan to continue using this podcast as a part of my daily growth.

    Secondly, I would be interested in learning more tips about how to stay in compliance with sales tax, accounting, and etc. when operating a dropship hair company. Also, advice on how to transition from drop shipping to purchasing bulk inventory would be nice as well.


  16. Levita Nov 13, 2017

    This podcast was freaking great you touched base on so many great things . as a new hair stylist there is alot of things i need to learn . I love the information you shared on fraudulent purchases ..and i am just like you i want to find you and hold you accountable because it is so hard out there in the hair industry and the last thing anyone needs is a scammer scamming you !!!
    the fraudulent charges is really becoming a big issue in the hair industry.so you are totally right if we work together to try and combat this situation it will do us all good in the hair industry.
    Another great topic was wanting to start a hair business without the start up ..the struggle is real lol ..being able to do drop shipping is a great opportunity for one who doesnt have the money like myself ..im able to build a clientel as well as make money from the drop shipping to do wholesale.

    Im totally excited and looking forward to starting a business.
    I would love to hear more from. This podcast on how to start your hair business how to market and brand your new business and most of all more information on building your email list .
    This podcast was packed with alot of useful information that you can actually add to your business ..
    Totally look forward to new episodes!!!

  17. Adrianne Brown-Johnson Nov 15, 2017

    Hi would love to win the contest giveaway! I think you all are doing great, I’m a stylist so I think you should talk about stylist setting up and selling in salons,

  18. Jocelyn Nov 15, 2017

    I appreciate that PLE staff takes the time to educate their customers (us) and not just “sell hair/products”. I’ve seen a few other dropship companies who try to duplicate and mimick PLE and have no idea what they are doing. It takes time, effort, passion, and love to want to give back to those who help you be successful and PLE does that. It’s important to know about fraud, chargebacks, scams, and how PayPal and other payment processors tie in. I also learned about Comsumer Fraud Agency’s website-I hasn’t heard about them prior to this. This was an awesome podcast, I enjoy listening to them all (patiently awaiting ep 8!!). I’d like to see PLE’s response to people saying “everybody sells hair..where do I fit in? How do I stand out?”. I feel like those are common questions in the industry that people don’t talk about. Also, how to provide excellent customer service meanwhile balancing a ft job and your hair biz-that can be tricky but is oh so important!

    Awaiting more knowledge!! Thanks PLE, Dropship Bundles, and How to Start a Hair Biz!!!

  19. Amirah Nov 16, 2017

    Oh how I wish I heard this BEFORE someone scammed me! I was losing my mind paypal held my funds for 90 days it was horrible. Thank you guys so much for this episode it was well needed. I hope you guys talk about SEO and protecting your business legally in the future.

  20. Monica Nov 18, 2017

    It’s scary the amount of fraud that goes around… thank you for sharing this information about how to prevent it… I was also interested in learning how social media is changing in the near future an how important it is for us to use email for marketing…. I would have never thought email would be one of the best ways to market!